THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(1), AHMEDABAD vs. GANGA INDUSTRIES, BHAVNAGAR

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ITSSA 52/AHD/2022Status: DisposedITAT Ahmedabad04 February 2025AY 2017-183 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal observed that the tax effect involved in the Revenue's appeal was Rs.56,73,253/-, which is less than Rs.60,00,000/-. Consequently, as per CBDT Circular No.09/2024 dated 17.09.2024, the appeal was liable to be withdrawn. The Revenue was granted liberty to restore the appeal in case of any exceptions mentioned in the circular. Therefore, the appeal filed by the Revenue was dismissed due to low tax effect. Regarding the Cross Objection filed by the assessee, the Ld. Sr. Counsel submitted that it was in support of the order passed by the Ld. CIT(A). As the Revenue's appeal was dismissed, the Cross Objection was also dismissed. The Tribunal did not decide the merits of the additions made under section 68.

What were the facts?

The Revenue, represented by the DCIT, Central Circle-1(1), Ahmedabad, filed an appeal before the ITAT against the order dated 25.10.2022 passed by the Commissioner of Income Tax(Appeals). The appeal pertains to Assessment Year 2017-18 and arises from an assessment order passed under section 153A of the Income-tax Act, 1961. The assessee, Ganga Industries, filed a Cross Objection against the Revenue's appeal. The Revenue's grounds of appeal challenged the deletion of additions made under section 68 of the Act, amounting to Rs.56,16,135/- on account of unexplained unsecured loans (opening balance) and Rs.17,27,883/- on account of unexplained unsecured loans (inter-group entries).

What were the issues?

1. Whether, in law and on facts, the CIT(A) erred in deleting the addition of Rs.56,16,135/- made under section 68 as unexplained unsecured loans (opening balance), despite the notarized deed dated 06.12.2016 not mentioning this balance (Revenue's contention). The assessee's contention is that the CIT(A)'s deletion was correct. 2. Whether, in law and on facts, the CIT(A) erred in deleting the addition of Rs.17,27,883/- made under section 68 as unexplained unsecured loans (inter-group entries), which were based on entries in seized excel sheets that the assessee could not satisfactorily explain (Revenue's contention). The assessee's contention is that the CIT(A)'s deletion was correct. 3. Whether the CIT(A) ought to have upheld the order of the Assessing Officer (Revenue's contention). The assessee's contention is that the CIT(A)'s order should be upheld. 4. Whether the Revenue's appeal should be dismissed due to low tax effect as per CBDT Circular No.09/2024 (Tribunal's observation).

Which sections of the Income-tax Act were involved?

Section 153A,Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “ A ” BENCH

Before: DR.BRR KUMAR & SHRI T.R SENTHIL KUMAR

Hearing: 04.02.2025Pronounced: 04.02.2025

PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER Asst.Year 2017-18

Income Tax(Appeals), arising out of the assessment order passed under section 153(A) of the Income-tax Act, 1961 [hereinafter referred to as ‘the Act’] relating to the Asst. Year 2017-18. The assessee has filed Cross Objection No.1/Ahd/2023 against the Revenue’s appeal.

2.

The Revenue has raised the following grounds of appeal:

1.

In the fact and on the circumstances of the case and in law, Ld.CIT(A) erred in deleting the addition u/s.68 of Rs.56,16,135/- made on account of unexplained unsecured loans, being opening balance, without appreciating the fact that in the nortarized deed dated 06.12.2016 there was no mention about the opening balance.

2.

In the facts and on the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition u/s 68 of Rs. 17,27,883/- made on account of unexplained unsecured loans, being inter-group entries, without appreciating the fact that the addition was made from the entries appeared in the seized excel sheets, which could not be explained by the assessee satisfactorily.

3.

On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O.

4.

It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent.

3.

At the outset, it has been observed that as per Form No.36 the Tax Effect involved in the above Departmental Appeal is Rs.56,73,253 which is less than the Rs.60,00,000/- and liable to be withdrawn as per the recent CBDT Circular No.09/2024 dated 17.09.2024. The Revenue is at liberty to restore the appeal, in case of any exceptions as mentioned in above Board Circular. Thus, the appeal filed by the Revenue is dismissed due to Low Tax Effect. Asst.Year 2017-18

C.O No.1/Ahd/2023 (in ITA No.1/Ahd/2023) for AY 2017-18

4.

The Ld. Sr. Counsel submitted that the Cross Objection is in support of the order passed by the Ld. CIT (A). Thus, the Cross Objection filed by the assessee is hereby dismissed.

In the combined result, both the appeal of the Revenue 5. and the Cross Objection of the assessee are hereby dismissed.

Order pronounced in the open court on 04.02.2025 (DR. BRR KUMAR) (T.R. SENTHIL KUMAR) VICE PRESIDENT JUDICIAL MEMBER () Ahmedabad : Dated 04.02.2025 Manish

आदेश क" "ितिलिप अ"ेिषत/Copy of the Order forwarded to : 1. अपीलाथ" / The Appellant

2.

""यथ" / The Respondent. 3. संबंिधत आयकर आयु" / Concerned Pr.CIT, Ahmedabad-1 4. आयकर आयु" अपील / The CIT(A)- ( ) 5. िवभागीय "ितिनिध अिधकरण अपीलीय आयकर राजोकट/DR,ITAT, Ahmedabad, , , 6. गाड" फाईल /Guard file.

आदेशानुसार/ BY ORDER, स"यािपत "ित //// सहायक पंजीकार (Asstt.

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